1.1.................... moves to amend H. F. No. 3599, the first engrossment, as follows:
1.2Delete everything after the enacting clause and insert:


1.5    Section 1. Minnesota Statutes 2006, section 116J.03, is amended by adding a
1.6subdivision to read:
1.7    Subd. 4. Targeted rural opportunity community. "Targeted rural opportunity
1.8community" means a city or township in a county that either lost population from 1980
1.9to 2000 according to the decennial census or had an unemployment rate higher than the
1.10Minnesota state annual average in 2006 according to local area unemployment statistics
1.11published by the Department of Employment and Economic Development.
1.12EFFECTIVE DATE.This section is effective the day following final enactment.

1.13    Sec. 2. Minnesota Statutes 2006, section 469.310, subdivision 11, is amended to read:
1.14    Subd. 11. Qualified business. (a) A person carrying on a trade or business at a
1.15place of business located within a job opportunity building zone is a qualified business
1.16for the purposes of sections 469.310 to 469.320 according to the criteria in paragraphs
1.17(b) to (f) (h).
1.18    (b) A person is a qualified business only on those parcels of land for which the person
1.19has entered into a business subsidy agreement, as required under section sections 469.3102
1.20and 469.313, with the appropriate local government unit in which the parcels are located.
1.21    (c) Prior to execution of the business subsidy agreement, the local government
1.22unit must consider the following factors:
1.23    (1) how wages compare to the regional industry average;
1.24    (2) the number of jobs that will be provided relative to overall employment in the
1.25community;
2.1    (3) the economic outlook for the industry the business will engage in;
2.2    (4) sales that will be generated from outside the state of Minnesota;
2.3    (5) how the business will build on existing regional strengths or diversify the
2.4regional economy;
2.5    (6) how the business will increase capital investment in the zone; and
2.6    (7) any other criteria the commissioner deems necessary.
2.7    (c) A business must achieve the goals listed in the business subsidy agreement
2.8within two years of the benefit date, or the business must repay the benefits listed in
2.9section 469.315. The commissioner of employment and economic development may
2.10extend the period for meeting any goals listed in a business subsidy agreement for up to
2.11one year if the commissioner has reason to believe the business will achieve the goals
2.12within the additional year.
2.13    (d) A person that begins or expands a trade or business is not a qualified business
2.14unless the business meets the requirements of paragraph (b) and increases full-time
2.15employment by a minimum of ten jobs within the first two years from the date the business
2.16subsidy agreement is signed, unless the business is located in a targeted rural opportunity
2.17community, in which case the business must increase full-time employment by a minimum
2.18of five jobs from the date the business subsidy agreement is signed.
2.19    (d) (e) A person that relocates a trade or business from outside a job opportunity
2.20building zone into a zone is not a qualified business unless the business meets all of the
2.21requirements of paragraphs paragraph (b) and (c) and:
2.22    (1) increases full-time employment in the first full year of operation within the job
2.23opportunity building zone within the first two years from the date the business subsidy
2.24agreement is signed by a minimum of five jobs or 20 percent, whichever is greater,
2.25measured relative to the operations that were relocated and maintains the required level of
2.26employment for each year the zone designation applies; and
2.27    (2) enters a binding written agreement with the commissioner business subsidy
2.28agreement that:
2.29    (i) pledges the business will meet the requirements of clause (1);
2.30    (ii) provides for repayment of all tax benefits enumerated under section 469.315 to
2.31the business under the procedures in section 469.319, if the requirements of clause (1) are
2.32not met for the taxable year or for taxes payable during the year in which the requirements
2.33were not met; and
2.34    (iii) contains any other terms the commissioner determines appropriate.
2.35    (e) (f) The commissioner may waive the requirements under paragraph (d), clause
2.36(1) or (e), if the commissioner determines that the qualified business will substantially
3.1achieve the factors under this subdivision waiver is necessary to retain an existing business
3.2from moving out of Minnesota.
3.3    (f) (g) A business is not a qualified business if, at its location or locations in the
3.4zone, the business is primarily engaged in making retail sales to purchasers who are
3.5physically present at the business's zone location.
3.6    (g) (h) A qualifying business must pay each employee compensation, including
3.7benefits not mandated by law, that on an annualized basis is equal to at least 110 percent of
3.8the federal poverty level for a family of four.
3.9    (h) (i) A public utility, as defined in section 336B.01, is not a qualified business.
3.10EFFECTIVE DATE.This section is effective the day following final enactment.

3.11    Sec. 3. [469.3101] STATE REVIEW CRITERIA.
3.12    (a) The commissioner may only approve a business subsidy agreement if the
3.13commissioner determines that the expected net benefits of the proposed project to the state
3.14and local economy exceed the expected tax benefits received by the business. In making
3.15this determination, the commissioner must consider the following factors:
3.16    (1) local or Minnesota competitors of the business that will be significantly and
3.17adversely effected by the business subsidy agreement;
3.18    (2) other financial assistance that is available;
3.19    (3) the business would not have expanded or began operations in Minnesota without
3.20the expected tax benefits;
3.21    (4) the business would not have relocated from outside the state to Minnesota
3.22without the expected tax benefits;
3.23    (5) the business would have moved to another state or expanded in another state
3.24rather than remaining or expanding in Minnesota without the expected tax benefits; and
3.25    (6) any other factors that the commissioner determines are appropriate.
3.26    (b) The local government unit and the qualified business must provide the
3.27commissioner with the information that the commissioner needs to review a business
3.28subsidy agreement under paragraph (a). The information must be in the form and manner
3.29required by the commissioner.
3.30EFFECTIVE DATE.This section is effective the day following final enactment.

3.31    Sec. 4. [469.3102] BUSINESS SUBSIDY AGREEMENTS; REPORTS.
3.32    Subdivision 1. JOBZ business subsidy agreement. A business subsidy agreement
3.33required under section 469.310, subdivision 11, paragraph (b), must comply with this
3.34section.
4.1    Subd. 2. Business subsidy agreement requirements. A business subsidy
4.2agreement is not effective until the commissioner has approved the agreement in writing.
4.3The commissioner may not approve an agreement that violates sections 116J.993 to
4.4116J.995 or 469.310 to 469.3201. The commissioner may not approve an agreement
4.5unless:
4.6    (1) the qualified business is required to create or retain a minimum number of jobs;
4.7    (2) the agreement defines "jobs" for purposes of determining compliance with wage
4.8and job goals as all jobs and only those jobs that constitute "employment" for purposes of
4.9state unemployment insurance;
4.10    (3) the qualified business is required to report all jobs created or retained because of
4.11JOBZ as a separate business location for purposes of section 268.044; and
4.12    (4) the qualified business agrees to provide the appropriate data practices release so
4.13that the commissioner of revenue and the commissioner of employment and economic
4.14development can monitor compliance with the terms of the agreement.
4.15    Subd. 3. Standard agreement. The commissioner must develop and require the
4.16use of a standard business subsidy agreement that imposes definitive and enforceable
4.17obligations on the qualified business.
4.18    Subd. 4. Business subsidy reports. (a) A local government unit must annually
4.19report to the commissioner on the progress of the qualified business in meeting the goals
4.20listed in the business subsidy agreement. The report must be filed with the commissioner
4.21within 30 days of the end of the immediately preceding yearly period for which job
4.22creation, job retention, or investment obligations are imposed on a business and must be
4.23in a form prescribed by the commissioner. The commissioner must schedule department
4.24compliance reviews and reporting dates under business subsidy agreements so that reports
4.25are due throughout the year and compliance reviews are done on a continuous basis as
4.26reports are filed.
4.27    (b) The commissioner must hold a qualified business out of compliance or remove
4.28the business from the program if the qualified business fails to provide the information
4.29requested by the local government unit for the report under paragraph (a) within 30 days
4.30of written notice that the information is overdue. This report is in lieu of the reports
4.31required under section 116J.994, subdivisions 7 and 8.
4.32    Subd. 5. Public notice and hearing. A local government unit must provide public
4.33notice and hearing as required under section 116J.994, subdivision 5, before approving a
4.34business subsidy agreement. Public notice of a proposed business subsidy agreement must
4.35be published in a local newspaper of general circulation. The public hearing must be held
4.36in a location specified by the local government unit. Notwithstanding the requirements of
5.1section 116J.994, subdivision 5, the commissioner is not required to provide an additional
5.2public notice and hearing when entering into a business subsidy agreement with a local
5.3government unit and a qualified business.
5.4EFFECTIVE DATE.This section is effective the day following final enactment.

5.5    Sec. 5. Minnesota Statutes 2006, section 469.312, subdivision 5, is amended to read:
5.6    Subd. 5. Duration limit. (a) The maximum duration of a zone is 12 years. The
5.7applicant may request a shorter duration. The commissioner may specify a shorter
5.8duration, regardless of the requested duration.
5.9    (b) The duration limit under this subdivision and the duration of the zone for
5.10purposes of allowance of tax incentives described in section 469.315 is extended by three
5.11calendar years for each parcel of property that meets the following requirements:
5.12    (1) the qualified business operates an ethanol plant, as defined in section 41A.09, on
5.13the site that includes the parcel; and
5.14    (2) the business subsidy agreement was executed after April 30, 2006.
5.15    (c) (1) Notwithstanding the 12-year zone limitation, all qualified businesses that sign
5.16a business subsidy agreement, as required under sections 469.310, subdivision 11, and
5.17469.313, before December 31, 2015, are entitled to claim the tax benefits for which they
5.18qualify under section 469.315 for the year in which the business subsidy agreement is
5.19signed and ten additional years.
5.20    (2) Notwithstanding the 12-year zone limitation, all qualified businesses that sign
5.21a business subsidy agreement, as required under sections 469.310, subdivision 11, and
5.22469.313, before December 31, 2015, and are located in a targeted rural opportunity
5.23community, as defined under section 116J.03, subdivision 4, are entitled to claim the tax
5.24benefits for which they qualify under section 469.315 for the year in which the business
5.25subsidy agreement is signed and 12 additional years.
5.26    (3) This paragraph does not apply to:
5.27    (i) any acreage designated as a job opportunity building zone for which any person
5.28has fully executed a business subsidy agreement before this paragraph became effective; or
5.29    (ii) any trade or business that relocated as defined in section 469.310, subdivision
5.3012, and received benefits under section 469.315 prior to the relocation.
5.31EFFECTIVE DATE.This section is effective the day following final enactment.


5.34    Section 1. Minnesota Statutes 2006, section 469.319, is amended to read:
6.1469.319 REPAYMENT OF TAX BENEFITS BY BUSINESSES THAT NO
6.2LONGER OPERATE IN A ZONE.
6.3    Subdivision 1. Repayment obligation. A business must repay the amount of the
6.4total tax reduction benefits listed in section 469.315 and any refund under section 469.318
6.5in excess of tax liability, received during the two years immediately before it (1) ceased to
6.6operate in the zone, if the business:
6.7    (1) received tax reductions authorized by section 469.315; and
6.8    (2)(i) did not meet the goals specified in an agreement entered into with the applicant
6.9that states any obligation the qualified business must fulfill in order to be eligible for tax
6.10benefits. The commissioner of employment and economic development may extend for
6.11up to one year the period for meeting any goals provided in an agreement. The applicant
6.12may extend the period for meeting other goals by documenting in writing the reason
6.13for the extension and attaching a copy of the document to its next annual report to the
6.14commissioner of employment and economic development; or
6.15    (ii) ceased to operate its facility located within the job opportunity building zone
6.16perform a substantial level of activities described in the business subsidy agreement, or
6.17(2) otherwise ceases ceased to be or is not a qualified business, other than those subject to
6.18the provisions of section 469.3191.
6.19    Subd. 1a. Repayment obligation of businesses not operating in zone. Persons
6.20that receive benefits without operating a business in a zone are subject to repayment
6.21under this section if the business for which those benefits relate is subject to repayment
6.22under this section. Such persons are deemed to have ceased performing in the zone on
6.23the same day that the qualified business for which the benefits relate becomes subject to
6.24repayment under subdivision 1.
6.25    Subd. 2. Definitions. (a) For purposes of this section, the following terms have
6.26the meanings given.
6.27    (b) "Business" means any person who that received tax benefits enumerated in
6.28section 469.315.
6.29    (c) "Commissioner" means the commissioner of revenue.
6.30    (d) "Persons that receive benefits without operating a business in a zone" means
6.31persons that claim benefits under section 469.316, subdivision 2 or 4, as well as persons
6.32that own property leased by a qualified business and are eligible for benefits under section
6.33272.02, subdivision 64, or 297A.68, subdivision 37, paragraph (b).
6.34    Subd. 3. Disposition of repayment. The repayment must be paid to the state to
6.35the extent it represents a state tax reduction and to the county to the extent it represents a
6.36property tax reduction. Any amount repaid to the state must be deposited in the general
7.1fund. Any amount repaid to the county for the property tax exemption must be distributed
7.2to the local governments taxing authorities with authority to levy taxes in the zone in the
7.3same manner provided for distribution of payment of delinquent property taxes. Any
7.4repayment of local sales taxes must be repaid to the commissioner for distribution to the
7.5city or county imposing the local sales tax.
7.6    Subd. 4. Repayment procedures. (a) For the repayment of taxes imposed under
7.7chapter 290 or 297A or local taxes collected pursuant to section 297A.99, a business must
7.8file an amended return with the commissioner of revenue and pay any taxes required
7.9to be repaid within 30 days after ceasing to do business in the zone becoming subject
7.10to repayment under this section. The amount required to be repaid is determined by
7.11calculating the tax for the period or periods for which repayment is required without
7.12regard to the exemptions and credits allowed under section 469.315.
7.13    (b) For the repayment of taxes imposed under chapter 297B, a business must pay any
7.14taxes required to be repaid to the motor vehicle registrar, as agent for the commissioner
7.15of revenue, within 30 days after ceasing to do business in the zone becoming subject
7.16to repayment under this section.
7.17    (c) For the repayment of property taxes, the county auditor shall prepare a tax
7.18statement for the business, applying the applicable tax extension rates for each payable
7.19year and provide a copy to the business and to the taxpayer of record. The business must
7.20pay the taxes to the county treasurer within 30 days after receipt of the tax statement.
7.21The business or the taxpayer of record may appeal the valuation and determination of the
7.22property tax to the Tax Court within 30 days after receipt of the tax statement.
7.23    (d) The provisions of chapters 270C and 289A relating to the commissioner's
7.24authority to audit, assess, and collect the tax and to hear appeals are applicable to the
7.25repayment required under paragraphs (a) and (b). The commissioner may impose civil
7.26penalties as provided in chapter 289A, and the additional tax and penalties are subject to
7.27interest at the rate provided in section 270C.40, from 30 days after ceasing to do business
7.28in the job opportunity building zone becoming subject to repayment under this section
7.29until the date the tax is paid.
7.30    (e) If a property tax is not repaid under paragraph (c), the county treasurer shall add
7.31the amount required to be repaid to the property taxes assessed against the property for
7.32payment in the year following the year in which the treasurer discovers that the business
7.33ceased to operate in the job opportunity building zone auditor provided the statement
7.34under paragraph (c).
7.35    (f) For determining the tax required to be repaid, a tax reduction of a state or local
7.36sales or use tax is deemed to have been received on the date that the tax would have
8.1been due if the taxpayer had not been entitled to the exemption or on the date a refund
8.2was issued for a refundable tax credit. good or service was purchased or first put to a
8.3taxable use. In the case of an income tax or franchise tax, including the credit payable
8.4under section 469.318, a reduction of tax is deemed to have been received for the two
8.5most recent tax years that have ended prior to the date that the business became subject to
8.6repayment under this section. In the case of a property tax, a reduction of tax is deemed to
8.7have been received for the taxes payable in the year that the business became subject to
8.8repayment under this section and for the taxes payable in the prior year.
8.9    (g) The commissioner may assess the repayment of taxes under paragraph (d)
8.10any time within two years after the business ceases to operate in the job opportunity
8.11building zone becomes subject to repayment under subdivision 1, or within any period of
8.12limitations for the assessment of tax under section 289A.38, whichever period is later. The
8.13county auditor may send the statement under paragraph (c) any time within three years
8.14after the business becomes subject to repayment under subdivision 1.
8.15    (h) A business is not entitled to any income tax or franchise tax benefits, including
8.16refundable credits, for any part of the year in which the business becomes subject to
8.17repayment under this section nor for any year thereafter. Property is not exempt from tax
8.18under section 272.02, subdivision 64, for any taxes payable in the year following the year
8.19in which the property became subject to repayment under this section nor for any year
8.20thereafter. A business is not eligible for any sales tax benefits beginning with goods
8.21or services purchased or first put to a taxable use on the day that the business becomes
8.22subject to repayment under this section.
8.23    Subd. 5. Waiver authority. (a) The commissioner may waive all or part of a
8.24repayment required under subdivision 1, if the commissioner, in consultation with
8.25the commissioner of employment and economic development and appropriate officials
8.26from the local government units in which the qualified business is located, determines
8.27that requiring repayment of the tax is not in the best interest of the state or the local
8.28government units and the business ceased operating as a result of circumstances beyond
8.29its control including, but not limited to:
8.30    (1) a natural disaster;
8.31    (2) unforeseen industry trends; or
8.32    (3) loss of a major supplier or customer.
8.33    (b)(1) The commissioner shall waive repayment required under subdivision 1a if
8.34the commissioner has waived repayment by the operating business under subdivision 1,
8.35unless the person that received benefits without having to operate a business in the zone
9.1was a contributing factor in the qualified business becoming subject to repayment under
9.2subdivision 1;
9.3    (2) the commissioner shall waive the repayment required under subdivision 1a, even
9.4if the repayment has not been waived for the operating business if:
9.5    (i) the person that received benefits without having to operate a business in the zone
9.6and the business that operated in the zone are not related parties as defined in section
9.7267(b) of the Internal Revenue Code of 1986, as amended through December 31, 2007; and
9.8    (ii) actions of the person were not a contributing factor in the qualified business
9.9becoming subject to repayment under subdivision 1.
9.10    Subd. 6. Reconciliation. Where this section is inconsistent with section 116J.994,
9.11subdivision 3 , paragraph (e), or 6, or any other provisions of sections 116J.993 to
9.12116J.995 , this section prevails.
9.13EFFECTIVE DATE.The amendment to subdivision 4, paragraph (c), of this
9.14section is effective the day following final enactment. The amendment to subdivision 4,
9.15paragraph (f), is effective retroactively from January 1, 2008, and applies to all businesses
9.16that become subject to this section in 2008 and thereafter. The rest of this section is
9.17effective retroactively from January 1, 2004, except that for violations that occur before
9.18the day following final enactment, this section does not apply if the business has repaid the
9.19benefits or the commissioner has granted a waiver.

9.20    Sec. 2. [469.3191] BREACH OF AGREEMENTS BY BUSINESSES THAT
9.21CONTINUE TO OPERATE IN ZONE.
9.22    (a) A "business in violation of its business subsidy agreement but not subject to
9.23section 469.319" means a business that is operating in violation of the business subsidy
9.24agreement but maintains a level of operations in the zone that does not subject it to the
9.25repayment provisions of section 469.319, subdivision 1, clause (1).
9.26    (b) A business described in paragraph (a) that does not sign a new or amended
9.27business subsidy agreement, as authorized under paragraph (h), is subject to repayment
9.28of benefits under section 469.319 from the day that it ceases to perform in the zone a
9.29substantial level of activities described in the business subsidy agreement.
9.30    (c) A business described in paragraph (a) ceases being a qualified business after the
9.31last day that it has to meet the goals stated in the agreement.
9.32    (d) A business is not entitled to any income tax or franchise tax benefits, including
9.33refundable credits, for any part of the year in which the business is no longer a qualified
9.34business under paragraph (c), and thereafter. A business is not eligible for sales tax
9.35benefits beginning with goods or services purchased or put to a taxable use on the day that
10.1it is no longer a qualified business under paragraph (c). Property is not exempt from tax
10.2under section 272.02, subdivision 64, for any taxes payable in the year following the year
10.3in which the business is no longer a qualified business under paragraph (c), and thereafter.
10.4    (e) A business described in paragraph (a) that wants to resume eligibility for benefits
10.5under section 469.315 must request that the commissioner of employment and economic
10.6development determine the length of time that the business is ineligible for benefits. The
10.7commissioner shall determine the length of ineligibility by applying the proportionate
10.8level of performance under the agreement to the total duration of the zone as measured
10.9from the date that the business subsidy agreement was executed. The length of time
10.10must not be less than one full year for each tax benefit listed in section 469.315. The
10.11commissioner of employment and economic development and the appropriate local
10.12government officials shall consult with the commissioner of revenue to ensure that the
10.13period of ineligibility includes at least one full year of benefits for each tax.
10.14    (f) The length of ineligibility determined under paragraph (e) must be applied by
10.15reducing the zone duration for the property by the duration of the ineligibility.
10.16    (g) The zone duration of property that has been adjusted under paragraph (f) must
10.17not be altered again to permit the business additional benefits under section 469.315.
10.18    (h) A business described in paragraph (a) becomes eligible for benefits available
10.19under section 469.315 by entering into a new or amended business subsidy agreement
10.20with the appropriate local government unit. The new or amended agreement must cover
10.21a period beginning from the date of ineligibility under the original business subsidy
10.22agreement, through the zone duration determined by the commissioner under paragraph
10.23(f). No exemption of property taxes under section 272.02, subdivision 64, is available
10.24under the new or amended agreement for property taxes due or paid before the date of
10.25the final execution of the new or amended agreement, but unpaid taxes due after that
10.26date need not be paid.
10.27    (i) A business that violates the terms of an agreement authorized under paragraph
10.28(h) is permanently barred from seeking benefits under section 469.315 and is subject to
10.29the repayment provisions under section 469.319 effective from the day that the business
10.30ceases to operate as a qualified business in the zone under the second agreement.
10.31EFFECTIVE DATE.This section is effective retroactively from January 1, 2004.
10.32For violations that occur before the day following final enactment, this section does not
10.33apply if the business has repaid the benefits or the commissioner has granted a waiver.

10.34    Sec. 3. [469.3192] PROHIBITION AGAINST AMENDMENTS TO BUSINESS
10.35SUBSIDY AGREEMENT.
11.1    Except as authorized under section 469.3191, under no circumstance shall terms
11.2of any agreement required as a condition for eligibility for benefits listed under section
11.3469.315 be amended to change job creation, job retention, or wage goals included in
11.4the agreement.
11.5EFFECTIVE DATE.This section is effective the day following final enactment
11.6and applies to all agreements executed before, on, or after the effective date.

11.7    Sec. 4. [469.3193] CERTIFICATION OF CONTINUING ELIGIBILITY FOR
11.8JOBZ BENEFITS.
11.9    (a) By December 1 of each year, every qualified business must certify to the
11.10commissioner of revenue, on a form prescribed by the commissioner of revenue, whether
11.11it is in compliance with any agreement required as a condition for eligibility for benefits
11.12listed under section 469.315. A business that fails to submit the certification, or any
11.13business, including those still operating in the zone, that submits a certification that
11.14the commissioner of revenue later determines materially misrepresents the business's
11.15compliance with the agreement, is subject to the repayment provisions under section
11.16469.319 from January 1 of the year in which the report is due or the date that the business
11.17became subject to section 469.319, whichever is earlier. Any such business is permanently
11.18barred from obtaining benefits under section 469.315. For purposes of this section, the bar
11.19applies to an entity and also applies to any individuals or entities that have an ownership
11.20interest of at least 20 percent of the entity.
11.21    (b) Before the sanctions under paragraph (a) apply to a business that fails to
11.22submit the certification, the commissioner of revenue shall send notice to the business,
11.23demanding that the certification be submitted within 30 days and advising the business
11.24of the consequences for failing to do so. The commissioner of revenue shall notify
11.25the commissioner of employment and economic development and the appropriate job
11.26opportunity subzone administrator whenever notice is sent to a business under this
11.27paragraph.
11.28    (c) The certification required under this section is public.
11.29    (d) The commissioner of revenue shall promptly notify the commissioner of
11.30employment and economic development of all businesses that certify that they are not
11.31in compliance with the terms of their business subsidy agreement and all businesses
11.32that fail to file the certification.
11.33EFFECTIVE DATE.This section is effective the day following final enactment.


12.3    Section 1. Minnesota Statutes 2007 Supplement, section 268.19, subdivision 1, is
12.4amended to read:
12.5    Subdivision 1. Use of data. (a) Except as provided by this section, data gathered
12.6from any person under the administration of the Minnesota Unemployment Insurance Law
12.7are private data on individuals or nonpublic data not on individuals as defined in section
12.813.02, subdivisions 9 and 12 , and may not be disclosed except according to a district court
12.9order or section 13.05. A subpoena is not considered a district court order. These data
12.10may be disseminated to and used by the following agencies without the consent of the
12.11subject of the data:
12.12    (1) state and federal agencies specifically authorized access to the data by state
12.13or federal law;
12.14    (2) any agency of any other state or any federal agency charged with the
12.15administration of an unemployment insurance program;
12.16    (3) any agency responsible for the maintenance of a system of public employment
12.17offices for the purpose of assisting individuals in obtaining employment;
12.18    (4) the public authority responsible for child support in Minnesota or any other
12.19state in accordance with section 256.978;
12.20    (5) human rights agencies within Minnesota that have enforcement powers;
12.21    (6) the Department of Revenue to the extent necessary for its duties under Minnesota
12.22laws;
12.23    (7) public and private agencies responsible for administering publicly financed
12.24assistance programs for the purpose of monitoring the eligibility of the program's
12.25recipients;
12.26    (8) the Department of Labor and Industry and the Division of Insurance Fraud
12.27Prevention in the Department of Commerce for uses consistent with the administration of
12.28their duties under Minnesota law;
12.29    (9) local and state welfare agencies for monitoring the eligibility of the data subject
12.30for assistance programs, or for any employment or training program administered by those
12.31agencies, whether alone, in combination with another welfare agency, or in conjunction
12.32with the department or to monitor and evaluate the statewide Minnesota family investment
12.33program by providing data on recipients and former recipients of food stamps or food
12.34support, cash assistance under chapter 256, 256D, 256J, or 256K, child care assistance
12.35under chapter 119B, or medical programs under chapter 256B, 256D, or 256L;
13.1    (10) local and state welfare agencies for the purpose of identifying employment,
13.2wages, and other information to assist in the collection of an overpayment debt in an
13.3assistance program;
13.4    (11) local, state, and federal law enforcement agencies for the purpose of ascertaining
13.5the last known address and employment location of an individual who is the subject of
13.6a criminal investigation;
13.7    (12) the United States Citizenship and Immigration Services has access to data on
13.8specific individuals and specific employers provided the specific individual or specific
13.9employer is the subject of an investigation by that agency;
13.10    (13) the Department of Health for the purposes of epidemiologic investigations; and
13.11    (14) the Department of Corrections for the purpose of postconfinement employment
13.12tracking of individuals who had been committed to the custody of the commissioner
13.13of corrections.; and
13.14    (15) the state auditor to the extent necessary to conduct audits of job opportunity
13.15building zones as required under section 469.3201.
13.16    (b) Data on individuals and employers that are collected, maintained, or used by
13.17the department in an investigation under section 268.182 are confidential as to data
13.18on individuals and protected nonpublic data not on individuals as defined in section
13.1913.02, subdivisions 3 and 13 , and must not be disclosed except under statute or district
13.20court order or to a party named in a criminal proceeding, administrative or judicial, for
13.21preparation of a defense.
13.22    (c) Data gathered by the department in the administration of the Minnesota
13.23unemployment insurance program must not be made the subject or the basis for any
13.24suit in any civil proceedings, administrative or judicial, unless the action is initiated by
13.25the department.
13.26EFFECTIVE DATE.This section is effective the day following final enactment.

13.27    Sec. 2. Minnesota Statutes 2006, section 270B.15, is amended to read:
13.28270B.15 DISCLOSURE TO LEGISLATIVE AUDITOR AND STATE
13.29AUDITOR.
13.30    (a) Returns and return information must be disclosed to the legislative auditor to the
13.31extent necessary for the legislative auditor to carry out sections 3.97 to 3.979.
13.32    (b) The commissioner must disclose return information, including the report
13.33required under section 289A.12, subdivision 15, to the state auditor to the extent necessary
13.34to conduct audits of job opportunity building zones as required under section 469.3201.
13.35EFFECTIVE DATE.This section is effective the day following final enactment.

14.1    Sec. 3. Minnesota Statutes 2006, section 289A.12, is amended by adding a subdivision
14.2to read:
14.3    Subd. 15. Report of job opportunity zone benefits; penalty for failure to file
14.4report. (a) By October 15 of each year, every qualified business, as defined under section
14.5469.310, subdivision 11, must file with the commissioner, on a form prescribed by the
14.6commissioner, a report listing the tax benefits under section 469.315 received by the
14.7business for the previous year.
14.8    (b) The commissioner shall send notice to each business that fails to timely submit
14.9the report required under paragraph (a). The notice shall demand that the business submit
14.10the report within 60 days. Where good cause exists, the commissioner may extend
14.11the period for submitting the report as long as a request for extension is filed by the
14.12business before the expiration of the 60-day period. The commissioner shall notify the
14.13commissioner of the Department of Employment and Economic Development and the
14.14appropriate job opportunity subzone administrator whenever notice is sent to a business
14.15under this paragraph.
14.16    (c) A business that fails to submit the report as required under paragraph (b) is no
14.17longer a qualified business under section 469.310, subdivision 11, and is subject to the
14.18repayment provisions of section 469.319.
14.19EFFECTIVE DATE.This section is effective beginning with reports required to be
14.20filed October 15, 2008.

14.21    Sec. 4. Minnesota Statutes 2006, section 469.3201, is amended to read:
14.22469.3201 JOBZ EXPENDITURE LIMITATIONS; AUDITS STATE
14.23AUDITOR; AUDITS OF JOB OPPORTUNITY BUILDING ZONES AND
14.24BUSINESS SUBSIDY AGREEMENTS.
14.25    The Tax Increment Financing, Investment and Finance Division of the Office of the
14.26State Auditor must annually audit the creation and operation of all job opportunity building
14.27zones and business subsidy agreements entered into under Minnesota Statutes, sections
14.28469.310 to 469.320. To the extent necessary to perform this audit, the state auditor may
14.29request from the commissioner of revenue tax return information of taxpayers who are
14.30eligible to receive tax benefits authorized under section 469.315. To the extent necessary
14.31to perform this audit, the state auditor may request from the commissioner of employment
14.32and economic development wage detail report information required under section 268.044
14.33of taxpayers eligible to receive tax benefits authorized under section 469.315.
14.34EFFECTIVE DATE.This section is effective the day following final enactment.


15.3    Section 1. [116J.8746] REGIONAL EMERGING BUSINESS INVESTMENT
15.4TAX CREDIT.
15.5    Subdivision 1. Definitions. For the purposes of this section, the following terms
15.6have the meanings given:
15.7    (1) "qualifying small business" means a business that:
15.8    (i) for a business with five or more employees, pays wages and benefits, measured
15.9on a full-time equivalent basis, to its employees in excess of the first five employees, equal
15.10to at least 110 percent of the federal poverty level for a family of four;
15.11    (ii) is engaged in, or is committed to engage in, biotechnology, technology,
15.12manufacturing, agriculture, processing or assembling products, conducting research and
15.13development, or developing a new product or business process;
15.14    (iii) is not engaged in real estate development, insurance, banking, lobbying, political
15.15consulting, wholesale or retail trade, leisure, hospitality, construction, or professional
15.16services provided by attorneys, accountants, business consultants, physicians, or health
15.17care consultants;
15.18    (iv) has its headquarters in Minnesota;
15.19    (v) employs at least 51 percent of the business's employees in Minnesota;
15.20    (vi) has less than 100 employees;
15.21    (vii) has less than $2,000,000 in annual gross sales receipts for the previous year;
15.22    (viii) is not a subsidiary or an affiliate of a business which employs more than 100
15.23employees or has total gross sales receipts for the previous year of more than $2,000,000,
15.24computed by aggregating all of the employees and gross sales receipts of the business
15.25entities affiliated with the business;
15.26    (ix) has not previously received more than $2,000,000 in private equity investments;
15.27and
15.28    (x) has not previously received more than $1,000,000 in investments that have
15.29qualified for and received tax credits under this section; and
15.30    (2) "regional investment fund" means a pooled investment fund that:
15.31    (i) invests in qualifying small businesses located in the region of the state that is the
15.32focus of the fund;
15.33    (ii) is organized as a limited liability company or other pass-through entity; and
15.34    (iii) has no fewer than five separate investors, each not owning more than 25 percent
15.35of the outstanding ownership interests in the fund. For purposes of determining the number
15.36of investors and the ownership interest of an investor under this clause, the ownership
16.1interests of an investor include those of the investor's spouse, children, and siblings, and
16.2any of the investor's corporations, partnerships, and trusts in which the investor has a
16.3controlling equity interest or in which the investor exercises management control.
16.4    Subd. 2. Credit allowed. A taxpayer is allowed a credit against the tax imposed
16.5under chapter 290 for qualifying investments made in the year by a qualifying regional
16.6investment fund. The credit equals 25 percent of the taxpayer's investment made in the
16.7fund, but not to exceed the lesser of:
16.8    (1) the liability for tax under chapter 290, including the applicable alternative
16.9minimum tax, but excluding the minimum fee under section 290.0922; and
16.10    (2) the amount of the certificate provided to the taxpayer by the fund under
16.11subdivision 4.
16.12    Subd. 3. Qualifying regional investment fund requirements. (a) To be certified as
16.13a qualifying regional investment fund for purposes of this section, a regional investment
16.14fund must:
16.15    (1) have a minimum of two-thirds of the regional investment fund's members,
16.16shareholders, or partners be residents of the region that is the focus of the fund; and
16.17    (2) allocate at least 60 percent of the funds it invests, or plans to invest, to qualified
16.18small businesses within the region.
16.19    (b) Investments from other regional investment funds into the qualified small
16.20business shall count toward the allocation in paragraph (a), clause (2).
16.21    (c) Investments in the fund may consist of equity investments or notes that pay
16.22interest or other fixed amounts, or any combination of both, as the fund's governing body
16.23determines appropriate.
16.24    Subd. 4. Certification of funds. (a) Regional investment funds may apply to the
16.25commissioner of employment and economic development for certification as a qualified
16.26regional investment fund. The application must be in the form and made under the
16.27procedures specified by the commissioner.
16.28    (b) The commissioner may certify up to 20 funds. Certifications shall be awarded
16.29in the order of qualifying applications received. Of the 20 funds, the commissioner may
16.30certify no more than three funds that seek business investment opportunities that may
16.31qualify for and receive tax credits under this section in more than 15 Minnesota counties,
16.32no more than five funds that seek business investment opportunities that may qualify for
16.33and receive tax credits under this section in the metropolitan area, as defined in section
16.34473.121, subdivision 2, and no more than three funds that seek business investment
16.35opportunities that may qualify for and receive tax credits under this subdivision in the
16.36same region of the state.
17.1    (c) The commissioner may provide certificates entitling investors in a certified fund
17.2to credits under this provision of up to $600,000 for each fund upon receipt of a report
17.3from the fund showing evidence of compliance with the agreement under subdivision 5,
17.4including investment in a qualifying small business. The commissioner may not issue a
17.5total amount of certificates for all funds of more than $3,000,000 in fiscal year 2009. If
17.6less than $3,000,000 of certificates are issued, the remaining funds may be carried over
17.7to the following two fiscal years. Certificates may only be issued for investments made
17.8by qualified funds in qualifying small businesses located in the region in which the fund
17.9operates.
17.10    Subd. 5. Fund requirements. The commissioner of employment and economic
17.11development shall enter into an agreement with each of the qualifying regional investment
17.12funds certified under subdivision 4. Each agreement must include a provision requiring
17.13the qualifying regional investment fund to report on the employment figures, wages,
17.14and benefits paid by the businesses in which investments are made, or are planned to
17.15be made, and a provision stating the specific manner in which the regional investment
17.16fund agrees to satisfy the requirement to allocate at least 60 percent of its investments to
17.17qualified small businesses within the region. The commissioner shall define "region"
17.18for the purposes of this section.
17.19    Subd. 6. Limitations. The taxpayer must claim the credit in the same tax year
17.20for which the fund receives the tax credit certificate under subdivision 4. The credit is
17.21allowed only for investments made in qualifying regional investment funds after the
17.22fund is certified by the commissioner of employment and economic development under
17.23subdivision 4.
17.24    Subd. 7. Statement of credit share. Each fund must provide to each investor
17.25a statement indicating the investor's share of the credit certified to the fund under
17.26subdivision 4, based on the investor's pro rata investment in the fund at the time of the
17.27investment in the qualified small business.
17.28    Subd. 8. Carryover. If the amount of the credit under this section for any taxable
17.29year exceeds the amount reached under subdivision 2, clause (1), the excess is a credit
17.30carryover to each of the ten succeeding taxable years. The entire amount of the excess
17.31unused credit for the taxable year must be carried first to the earliest of the taxable years
17.32to which the credit may be carried. The amount of the unused credit that may be added
17.33under this subdivision may not exceed the taxpayer's liability for tax, less the credit for
17.34the taxable year.
18.1    Subd. 9. False applications. (a) A taxpayer who has received a credit under this act
18.2for an investment in a regional investment fund forfeits any unused credit if:
18.3    (1) the regional investment fund does not meet the conditions of subdivision 3; or
18.4    (2) the small business invested in by the fund does not meet the conditions in
18.5subdivision 1.
18.6    (b) Any credits taken on a tax return shall be returned to the commissioner of
18.7revenue as an underpayment of tax, if:
18.8    (1) the regional investment fund does not meet the conditions of subdivision 3; or
18.9    (2) the small business invested in by the fund does not meet the conditions in
18.10subdivision 1.
18.11EFFECTIVE DATE.This section is effective July 1, 2008, for taxable years
18.12beginning after December 31, 2007, and only applies to investments made after the fund
18.13has been certified by the commissioner of employment and economic development.

18.14    Sec. 2. Minnesota Statutes 2006, section 290.06, is amended by adding a subdivision
18.15to read:
18.16    Subd. 34. Regional emerging business investment tax credit. A taxpayer is
18.17allowed a credit as determined under section 116J.8746 against the tax imposed by this
18.18chapter.
18.19EFFECTIVE DATE.This section is effective July 1, 2008, for taxable years
18.20beginning after December 31, 2007, and only applies to investments made after the fund
18.21has been certified by the commissioner of employment and economic development."
18.22Amend the title accordingly